April 22, 2020

By Lynda Kiernan

Israeli foodtech startup and Trendlines portfolio company Hargol FoodTech has raised $3 million in a round consisting of existing investors including Singapore-based Sirius Venture Capital, and the Netherlands-based SLJ Investment Partners. 

Founded in 2014, and a pioneer in commercial scale grasshopper farming, Hargol has developed an innovative farming system to produce high-quality and sustainable grasshopper protein in climate-controlled facilities at industrial scale. Using its proven technology and optimized methods for farming grasshoppers under sanitary conditions, Hargol has consistently proven that its grasshoppers contain more than 70 percent protein, high levels of omega-3 and omega-6, and all essential amino acids, positioning the company to be a leader in meeting the doubling in demand for protein by 2050.

“The world is looking to reinvent dietary habits to cope with double the demand for protein as the global population increases by 2050,” said Eugene Wong, founder and managing director, Sirius Venture Capital. “To address this global concern, Hargol is on an insect-to-food mission to produce grasshoppers as an alternative protein source. This represents an immense untapped market at the intersection of this issue.”

Although still far from being mainstream in Western cultures, the numerous benefits of sourcing protein from insects – namely, high conversion rates, the need for less processing compared to plant protein, and being more palatable compared to algae – paired with the EU Commission’s approval of insect-derived protein for inclusion in aquaculture feed rations on December 13, 2016 – has prompted a range of startups in the space and interest from the investment universe.

This growing acceptance has been reflected in the number of recent investment deals and the larger capital rounds being announced. Companies including Dutch biotech startup Protix, Irish biotech startup Hexafly, and French startups NextProtein and Ynsect have all been raising capital since 2016. More recently, however, the industry has been gaining traction with larger investments from more high-profile investors. 

This trend has been reflected by UK-based AgriProtein, the world’s largest fly farming and insect technology company, that announced its agreement to acquire Millibeter N.V., a Belgian insect feed company, for an undisclosed amount, and Darling Ingredients, a global producer of sustainable and natural ingredients and specialty solutions, that announced it had bought-out Intrexon, acquiring the remaining 50 percent stake it had not already owned in EnviroFlight – a producer of non-pathogenic black soldier fly larvae at scale.

Also telling is the fact that in October 2019, Thai Union, the world’s largest producer of shelf-stable tuna products, launched a $30 million food tech venture fund, and made its maiden investment in Flying SpArk, another Isareli insect-based alternative protein startup.

Indeed, investment prospects for the industry are set only to strengthen, as earlier this month it was reported that the European Food Safety Authority is expected within weeks to approve grasshoppers, whole or ground mealworms, lesser mealworms, locusts, and crickets as being safe for human consumption.

This ruling will set the aforementioned proteins as “novel foods” in the EU as early as the fall of 2020.

“We reckon these authorizations will be a breakthrough for the sector so we are looking for those authorizations quite impatiently,” Christohpe Derrien, secretary general for the International Platform of Insects for Food and Feed, told the Guardian. “They are taking the necessary time, they are very demanding on information, which is not bad. But we believe that once we have the first novel food given a green light from EFSA that will have a snowball effect.”

With a growth horizon such as this before them, Hargol intends to use the capital garnered from this latest fundraising to expand production capacity, including a new production facility and the launch of a new Biblical Protein product line.

“With incredible interest from the market in our new line of theological food products – Biblical Protein – we are excited by the opportunity to offer a combination of modern, healthy and sustainable innovative food products that are connected to humanity’s origin,” said Dror Tamir, CEO of Hargol.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.